The NSE Nifty 50 index ended 0.61% higher at 11,247.10, while the S&P BSE Sensex rose 0.46% to 38,050.78.

"Along with mass production, the roadmap for distribution of vaccine to every single Indian in the least possible time is also ready," Modi said in his Independence Day speech on Saturday.

He reiterated plans to improve the country's infrastructure by spending more than 110 trillion rupees ($1.47 trillion) on around 7,000 projects.

"Sentimentally the government's announcement is a positive but we'll have to see how these are implemented," said Saurabh Jain, assistant vice president research at SMC Global Securities in New Delhi.

In Mumbai trading, NTPC closed 7.47% higher and was the top boost on the main indexes. On Friday, the firm posted a better-than-expected quarterly profit.

Auto stocks also rallied, with the Nifty Auto index finishing 2.43% higher. Motherson Sumi Systems Ltd and Eicher Motors Ltd advanced the most and closed up 6% and 4.79%, respectively.

Britannia Industries Ltd rose 2.46% after the biscuit maker approved fund raising plans.

The Nifty Infrastructure Index closed up 0.63% and the Nifty public sector enterprise index finished 2.33% higher.

Financial stocks lost ground on Monday, with the Nifty PSU Bank index closing lower for a third straight session, settling 0.46% down.

Shares of top lender State Bank of India closed down 1.55% and oil-to-telecoms conglomerate Reliance Industries Ltd fell nearly a percent. Both scrips were among the top drags on the Nifty.

Meanwhile, India's COVID-19 death toll crossed 50,000 and total coronavirus cases stood at nearly 2.65 million as of Monday.

By Chandini Monnappa